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Exploratory session focuses on municipal power

by jmaloni
Fri, Mar 25th 2011 05:15 pm
Representatives from Porter, Lewiston and the Town of Niagara hear the merits of municipal electrical power. Pictured are Town of Porter Supervisor Mert Wiepert, Town of Lewiston Supervisor Steve Reiter and Town of Niagara Supervisor Steve Richards.
Representatives from Porter, Lewiston and the Town of Niagara hear the merits of municipal electrical power. Pictured are Town of Porter Supervisor Mert Wiepert, Town of Lewiston Supervisor Steve Reiter and Town of Niagara Supervisor Steve Richards.
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Story and photos by Terry Duffy

"We're here to talk about low-cost electricity," said Town of Niagara Supervisor Steve Richards to a crowd gathered at Porter Town Hall Monday. Consisting mostly of representatives from the towns of Lewiston, Porter and Town of Niagara plus interested residents, the exploratory session focused on the possibilities of forming a tri-municipal power company to serve the communities.

Richards, longtime member of the Niagara Power Coalition, which worked on behalf of constituent communities during the federal relicensing process for the Niagara Power Project, briefly detailed past interest by that group in forming its own municipal electric company. "What I got out of that was that the state of New York right now allows any municipal entity in this state to form their own electric company," said Richards.

He told the crowd what they already knew: that electrical costs in the communities are way too high and there's a culprit - the power distribution factor via National Grid. "We pay among the highest electrical costs in the country ... because of National Grid, due to the transportation of electricity.

"Once I found out that we could buy the utility ourselves by eminent domain, I said 'game on' for us," said Richards.

He said the workings are already in place, pointing to the Niagara Power Project in Lewiston and transmission lines in the Town of Niagara. "The maximum value of the electric infrastructure in my town is $1 million."

Richards said he approached the Town of Lewiston earlier during the Fred Newlin administration on the idea of removing National Grid forerunner Niagara Mohawk from the process, but to no avail. "Until you get rid of National Grid, you'll continue to have a strangle hold here, you have no chance," said Richards.

He told the crowd of other communities in Western New York that have done it - Springville, Great Valley, Little Valley, Akron. "They all have their municipal electric companies."

"At the end of the day we ask, how can we reduce (the cost of) electricity?" asked Richards.

One way said Richards is by the three towns to team together and form their own municipal power group. Towns would by-pass National Grid as host, and act as on their own negotiator, buyer and seller of electricity, as well as be the distribution and service network provider to their respective municipalities, businesses and residential consumers. Richards said State Sen. George Maziarz was appraised earlier by the New York Power Authority that Niagara County has had the workings in place for the past 33 years to create and operate such a municipal electrical network but has yet to do so. "For 33 years we have been paying at least 40 percent too much" for electricity," said Richards.

Municipal power advocate Al Coppola, a former state senator and City of Buffalo councilman, told attendees of his efforts over the past 30 years in pursuit of cheaper electrical power for municipalities. He recalled one particular referendum in Buffalo for the city to let voters pursue an alternative municipal option that failed by one council vote, due to pressure exerted at that time by Niagara Mohawk, electrical service provider forerunner to National Grid.

Coppola said the big determining factor back then is the same as it is now: distribution costs. He said Niagara Mohawk at that time was beset with cost overruns from constructing the 9-Mile 2 power plant and opted to tap into distribution to cover costs. "Niagara Mohawk went into debt with 9-Mile 2 and passed the cost to consumers," said Coppola.

For National Grid and other companies who hold what he called the electrical distribution monopoly for customers, it remains the same today.

"There is competition out there," he said. "You can buy power separately ... on the supply side. There are a lot of vendors out there ... so called competition."

But for power companies like National Grid, "That's not good enough," said Coppola. "The supply side is one thing, but they're killing us on the delivery charge." He said, for example, customers pay National Grid 22 cents per kilowatt-hour in distribution costs alone. While municipal electric companies such as those mentioned in Akron, Springville, etc., pay the state Power Authority directly 1.5 cents per kilowatt-hour.

"If you own your own, you're so much farther ahead," said Coppola. He said that municipalities in WNY have done it. Others in the state such as the Alliance for Municipal Power in St. Lawrence and Franklin counties in northern New York state have been pursuing it via feasibility studies. He urged the representatives from Lewiston, Porter and the Town of Niagara to conduct their own and seriously consider pursuing it.

"We are on our own here, we can do this," said Richards, pointing out that state law provides for municipalities to do so and said the towns should get aggressive. He and the other supervisors all agreed that mechanisms could easily be established in each of the respective communities, in the form of acquiring lines, maintaining them, hiring workers and providing electrical service to consumers.

Lewiston Supervisor Steve Reiter, whose town benefits from the 6.5 megawatts of low-cost power allotment from NYPA as the result of the relicensing package, agreed. He pointed to shortfalls seen in the town's power discount package from Niagara Mohawk, which was since transferred to National Grid. Lewiston's electrical consumers, who once enjoyed electrical power discounts as high as 59 percent under the agreement worked out under the Newlin administration, have seen those discounts continually drop over the years as market forces have grown to dictate costs. Now, coupled with high distribution factors, the town actually faces the prospect of owing the company rather than reaping discount benefits. "The hit with National Grid is so bad, Lewiston is in the hole for it," said Reiter. "Lewiston had a power discount, which has evaporated due to distribution costs."

He said Lewiston and other towns should seriously team up and pursue this, especially when Lewiston's low-cost power allotment is factored in. "Our towns are already running our own utilities ... water and sewer departments. We have an opportunity here to control our own destiny," said Reiter.

Richards said the group would be holding its next session at Town of Niagara Town Hall, 7105 Lockport Road, during the first week of April. (Date and time to be announced). Expected to be in attendance are municipal power experts from New York City and Washington, D.C., who are currently working on behalf of the 24 communities in St. Lawrence and Franklin counties that are pursuing formation of a regional public electric utility.

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